100875 P.E.I. Inc. v. Curran & Briggs Ltd., (2010) 297 Nfld. & P.E.I.R. 330 (PEICA)

• Judge: McQuaid, J.A.
• Case Date: April 08, 2010
• Jurisdiction: Prince Edward Island
• Citations: (2010), 297 Nfld. & P.E.I.R. 330 (PEICA)

100875 P.E.I. v. Curran (2010), 297 Nfld. & P.E.I.R. 330 (PEICA);

    918 A.P.R. 330

MLB headnote and full text

Temp. Cite: [2010] Nfld. & P.E.I.R. TBEd. AP.025

100875 P.E.I. Inc. (appellant/respondent) v. Curran & Briggs Limited (respondent/applicant)

(S1-CA-1191; 2010 PECA 8)

Indexed As: 100875 P.E.I. Inc. v. Curran & Briggs Ltd.

Prince Edward Island Court of Appeal

McQuaid, J.A.

April 21, 2010.

Summary:

The plaintiff filed a mechanics' lien against the defendant's property. The lien purported to be filed in accordance with the provisions of the Mechanics' Lien Act. The plaintiff commenced an action in the Supreme Court to enforce the lien. The defendant filed a notice of motion seeking an order under s. 53(2) of the Act that the lien be discharged, an order under s. 52 that the claim for the lien be apportioned equitably against the defendant's lands and an order under s. 53(1) that the lien claim be discharged upon the defendant providing security suitable to the court.

The Prince Edward Island Supreme Court, Trial Division, dismissed the motion, holding that the Act did not provide for the disposition of an action to enforce a mechanics' lien without a trial. Alternatively, he found that the conflicting material facts necessitated a trial to resolve the factual dispute. The defendant appealed. The plaintiff sought an order for security for costs under rule 61.14 of the Rules of Court.

The Prince Edward Island Court of Appeal, per McQuaid, J.A., dismissed the application.

Practice - Topic 8105

Costs - Security for costs - General principles - Considerations - The plaintiff filed a lien against the defendant's property under the Mechanics' Lien Act - The plaintiff commenced an action in the Supreme Court to enforce the lien - The defendant filed a notice of motion seeking an order under s. 53(2) of the Act that the lien be discharged, an order under s. 52 that the claim for the lien be apportioned equitably against the defendant's lands and an order under s. 53(1) that the lien claim be discharged upon the defendant providing security suitable to the court - The Prince Edward Island Supreme Court, Trial Division, dismissed the motion, holding that the Act did not provide for the disposition of an action to enforce a mechanics' lien without a trial - Alternatively, the court found that the conflicting material facts necessitated a trial to resolve the factual dispute - The defendant appealed - The plaintiff sought an order for security for costs under rule 61.14 of the Rules of Court - The Prince Edward Island Court of Appeal, per McQuaid, J.A., dismissed the application - The court held, inter alia, that the plaintiff had not met the test under rule 61.14(a) (there was good reason to believe that the appeal was frivolous and vexatious and that the appellant had insufficient assets in Prince Edward Island to pay the costs of the appeal) - The plaintiff's position had an arguable legal foundation deserving of a hearing on appeal and without the plaintiff having to post security for the costs of the appeal, and the plaintiff had pursued the appeal with diligence - Further, it was not shown that the plaintiff had insufficient assets in the province to pay the costs that it might be ordered to pay should the appeal be unsuccessful - Finally, an order for costs payable on the motion had not been fixed and was also under appeal - Even if the costs of the motion were assessed and remained outstanding, an outstanding order to pay costs in another proceeding was not grounds for a plaintiff to obtain security against a defendant (rules 61.14(1)(b), 56.01(c)) - See paragraphs 1 to 39.

Practice - Topic 8111

Costs - Security for costs - General principles - Where plaintiff has failed to satisfy prior judgment or order - [See Practice - Topic 8105 ].

Practice - Topic 8120.4

Costs - Security for costs - General principles - Where claim frivolous or vexatious - Rule 61.14(1)(a) of the Rules of Court provided as follows: "In an appeal where it appears that, (a) there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Prince Edward Island to pay the costs of the appeal ..., a judge of the Court of Appeal, on motion by the respondent, may make such order for security for costs of the proceeding and of the appeal as is just." - The Prince Edward Island Court of Appeal, per McQuaid, J.A., stated that "A frivolous or vexatious proceeding, including an appeal, is one which is devoid of merit, completely lacking in substance and which is launched simply to annoy the other side." - See paragraph 26.

Practice - Topic 8200

Costs - Security for costs - Security for costs of an appeal - General - Rule 61.14(1)(a) of the Rules of Court provided as follows: "In an appeal where it appears that, (a) there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Prince Edward Island to pay the costs of the appeal ..., a judge of the Court of Appeal, on motion by the respondent, may make such order for security for costs of the proceeding and of the appeal as is just." - The Prince Edward Island Court of Appeal, per McQuaid, J.A., stated that "the court, in applying rule 61.14(1)(a), assesses whether there is any reason to believe the appeal is frivolous and vexatious. Also, against the backdrop of this assessment of the merits, the court may consider any apparent motives for launching the appeal as well as the level of diligence employed by the appellant in pursuit of the appeal. This approach allows the court, if there is reason to believe the appeal is frivolous or vexatious, to make an order protecting a respondent from the burden of costs while at the same time allowing the appellant to go forward and argue before a full panel of the court of appeal that the appeal has merit and should be allowed." - See paragraph 25.

Practice - Topic 8201

Costs - Security for costs - Security for costs of an appeal - Jurisdiction - Rule 61.14(1)(b) of the Rules of Court provided as follows: "In an appeal where it appears that, ... (b) an order for security for costs could be made against the appellant under Rule 56.01 ..., a judge of the Court of Appeal, on motion by the respondent, may make such order for security for costs of the proceeding and of the appeal as is just." - The Prince Edward Island Court of Appeal, per McQuaid, J.A., stated that "to be successful in seeking an order for security for costs under rule 61.16(1)(b), the party against whom the order is sought must be brought within rule 56.01. As rule 56.01 does not permit a plaintiff to obtain an order for security for costs against a defendant, an appellant/defendant is not subject to such an order pursuant to rule 61.14(1)(b). Rule 61.14(1)(b) is therefore confined to a situation where the appellant was the plaintiff at trial." - See paragraph 12.

Practice - Topic 8201

Costs - Security for costs - Security for costs of an appeal - Jurisdiction - Rule 61.14(1) of the Rules of Court provided as follows: "In an appeal where it appears that, (a) there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Prince Edward Island to pay the costs of the appeal; (b) an order for security for costs could be made against the appellant under Rule 56.01; or (c) for other good reason, security for costs should be ordered, a judge of the Court of Appeal, on motion by the respondent, may make such order for security for costs of the proceeding and of the appeal as is just." - The Prince Edward Island Court of Appeal, per McQuaid, J.A., stated that "Whether there is reason to believe the appeal is frivolous and vexatious is not a ground that can be relied upon to obtain an order under rule 61.14(c). Similarly, the alleged inability of the defendant/appellant to pay costs of an appeal is a ground provided for in rule 61.14(1)(b) and because this rule does not apply to the appellant/defendant, access to this ground cannot be gained through the backdoor by reliance upon rule 61.14(1)(c)." - See paragraph 18.

Cases Noticed:

Ayangma v. Prince Edward Island (2006), 260 Nfld. & P.E.I.R. 234; 786 A.P.R. 234; 2006 PESCAD 23, folld. [para. 12].

Znamensky Selekcionno-Gibridny Center LLC v. Donaldson International Livestock Ltd., [2010] O.A.C. Uned. 87; 2010 ONCA 137, folld. [para. 13].

Darville et al. v. Island Regulatory and Appeals Commission, [2003] Nfld. & P.E.I.R. Uned. 29; 2003 PESCAD 13, refd to. [para. 20].

Fraser et al. v. Professional Propane Services, 2004 PESCAD 24, refd to. [para. 20].

Ayangma v. French School Board et al. (2010), 294 Nfld. & P.E.I.R. 222; 908 A.P.R. 222; 2010 PECA 3, refd to. [para. 20].

Schmidt v. Toronto-Dominion Bank (1995), 82 O.A.C. 233; 24 O.R.(3d) 1 (C.A.), refd to. [para. 21].

Horton v. Joyce and Blaney et al. (1994), 73 O.A.C. 395; 20 O.R.(3d) 59 (C.A.), refd to. [para. 21].

McKee v. Di Battista, Gambin Developments Ltd. (1995), 80 O.A.C. 9; 22 O.R.(3d) 200; 1995 CarswellOnt 1708 (C.A.), refd to. [para. 21].

Mercier v. Summerside Police Department, [2010] Nfld. & P.E.I.R. Uned. 2; 2010 PESC 1, refd to. [para. 26].

Statutes Noticed:

Rules of Court (P.E.I.), Supreme Court Rules, rule 61.14(1)(a), rule 61.14(1)(b), rule 61.14(1)(c) [para. 10]; rule 56.01 [para. 12].

Supreme Court Rules (P.E.I.) - see Rules of Court (P.E.I.), Supreme Court Rules.

Counsel:

J. Michael McGonnell, for the appellant/respondent;

Douglas R. Drysdale, Q.C., for the respondent/applicant.

This motion was heard in Chambers on April 8, 2010, by McQuaid, J.A., of the Prince Edward Island Court of Appeal, who delivered the following reasons for judgment on April 21, 2010.